Canadian regulators examine sales of “incidental” insurance

Canadian insurance regulators are considering the regulation of the sales of incidental insurance.

Regulators are worried that if insurance is sold as an ancillary part of a larger purchase, an unsuitable insurance product might lead consumers to pay for insurance they do not need, pay for coverage for claims for which they are not eligible, or obtain a claims result that they did not expect, according to a consultation document issued by Canadian insurance regulators.

The paper, ‘Incidental Selling of Insurance,’ was recently released by The Canadian Council of Insurance Regulators (CCIR) and The Canadian Insurance Services Regulatory Organization (CISRO).

The paper includes discussion about a variety of topics related to incidental selling of insurance: suitability and documentation, coverage and claims, potential conflict of interest, disclosure requirements and availability of statistical information related to the incidental selling of insurance (ISI).

The paper notes many ISI sellers are perceived as having no obvious incentive to ensure product suitability to the specific consumer, though the consumer may not realize this.

The paper is available at: http://www.ccirccrra.org/CCIR/publications/index_en.htm